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Born in the Woodvale Road district of the Shankill Road area of Belfast, Smyth was one of nine children and was educated locally and worked as a metal bonder in the Short Brothers factory before entering full-time politics.[1][3]

Smyth first came to attention in the early 1970s when he served as a public spokesman for the Ulster Volunteer Force[5] although he was not an active member of the organisation.[6] His inspiration for politics was the struggle his father endured whilst working to support his family. Deeply opposed to what he described as 'Big House Unionism', he stated that at that time Belfast City Council was composed mostly of upper class unionists who sought to obstruct working class council members by holding council meetings during the daytime, when working class councillors were required to be at work.[3]

Smyth and some like-minded followers came together in 1978 under the name Independent Unionist Group, a more formalised alliance of working-class independent unionists based in Belfast of which Smyth was leader. The group was close to the UVF.[2] This group would change its name to the Progressive Unionist Party the following year as a response to the growing Ulster nationalism within the Ulster Defence Association, with Smyth and his fellow founders fearing that their description as "independent Unionists" might lead to them being associated with independence to which they were opposed. Smyth was close to leading UVF member Gusty Spence, who had become a supporter of political methods, and the two worked to recruit David Ervine to the PUP after being impressed by his ability as a speaker.[10]

As leader of the PUP, Smyth ran as a candidate for West Belfast in the elections to the 1982 Assembly although he failed to take the seat and the PUP as a whole did not gain any representation.[2] Although Smyth managed to build up a strong personal following on the Shankill Road, this did not transfer to the rest of the PUP which enjoyed little success elsewhere, barring a single member's election to Carrickfergus Borough Council in 1985 and 1989, until after the 1994 ceasefire.[12]

Smyth was first elected to the council in 1972 as representative for the Shankill ward. He won a by-election resulting from the resignation of John McQuade, and beat James Brown of the Ulster Unionist Party and David Robb of the Ulster Constitution Party in a three-way contest. In the election, he received the support of McQuade's party, the Democratic Unionists.[13] Following a change in council structure, he was re-elected the following year for "Area E" which included the Glencairn, Woodvale, Ballysillan, Highfield, Legoniel and Ardoyne areas. He subsequently represented the Court electoral area which covered Glencairn, Highfield, Woodvale and the mid and lower Shankill areas.[4] Smyth was appointed as Alderman in 1978, receiving the same honour in 1985, 1989 and 1993. In 1983 he was chosen as deputy mayor and served in this capacity again in 1993 before being appointed as Lord Mayor in June 1994. He again served as deputy mayor in 2001.[4] As a councillor Smyth had been willing to oppose the main unionist parties on some issues, as he demonstrated in 1991 when he helped to overturn a ban on government ministers visiting Belfast City Hall, an initiative passed by unionist councillors in 1985 as a reaction to the Anglo-Irish Agreement.[2]

Following his election Smyth clashed with UK Unionist Party leader Robert McCartney who, like Smyth, was born in Belfast's Shankill Road. McCartney suggested that the two were thus similar but for one thing – McCartney had got out, a rebuke to Smyth and the run-down and deprived state of the Shankill area.[17] Around this time he also criticised the DUP. Referring to the scene of an IRA bomb attack in 1972 at the Four Step Inn where he was helping retrieve bodies from the rubble, Ian Paisley approached him and said "Your worries are over. I have just formed the DUP. Everything is going to be all right". Smyth was unimpressed and remarked "but another 3000 people are dead and buried and what has the DUP done. It has done nothing."[18]